Diagnosing and Designing the Basic Structure (Anatomy, Step I)

The first diagnostic step involves finding the basic structure, which focuses attention on what customers pay for. Anchoring responsibility for customer value in the operational units lays the foundation for the enterprise to achieve its best possible impact in terms of its purpose and to gain market share. We begin by gaining an overview of the levels of recursion existing in the enterprise. Next, we select a level of recursion as our “System in Focus” and examine different segmentation options. Depending on how we design the anatomy of our enterprise, it will be easier or more difficult to innervate afterward. We choose that variant with which we can most successfully impact the customer’s purchase-decision criteria and with which we can most easily implement our strategic thrusts. This will enable us to determine the building blocks of the organization (System 1), and thus to lay its foundations. Having the right basic structure will facilitate success.